How do admins typically manage server upgrades across multiple servers? It seems like Microsoft is always coming out with upgrades that require the server to be rebooted, but we have a half dozen production servers, and every time one is rebooted users are stuck without access. How do most small-medium shops handle this situation?

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Beyond that it's finding what tool(s) will make your update process the most efficient so that you minimize the impact of downtime.

WSUS is an option for the Windows environment. Other patch management solutions are available as well. These will not handle many third party products, however. With those you are limited to their patching mechanism.